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Price Signal Summary - USDJPY Candle Pattern Highlights Potential Reversal

OUTLOOK
  • In FX, a bullish theme in EURUSD remains intact and the focus is on 1.1005, Aug 11 high and 1.1065, the Aug 10 high and a key resistance. Moving average studies have crossed and are currently in a bull-mode position, highlighting positive market sentiment. Note that the 14-day RSI has spilled over 70, flagging a technically overbought condition in the pair. A corrective pullback would unwind this condition. Initial support lies at 1.0825, Nov 17 low.
  • A bull cycle in GBPUSD traded higher Tuesday reinforcing current bullish conditions. Resistance at 1.2506, the Nov 14 high has been cleared The break confirms a resumption of the uptrend and maintains a price sequence of higher highs and higher lows. Sights are on 1.2589, 50.0% of the Jul 14 - Oct 4 bear leg. On the downside, initial support to watch has been defined at 1.2374, the Nov 17 low.
  • The latest pullback in USDJPY is likely part of a correction. The move lower has resulted in a break of both the 20- and 50-day EMAs, exposing trendline support at 146.10 - the trendline is drawn from the Mar 24 low. It is however possible that the correction is over. Yesterday’s price pattern is a dragonfly doji candle, a reversal signal. If correct, it signals scope for a stronger rally that would expose key resistance at 151.95, the Oct 21 2022 high. Initial support lies at 147.15, yesterday’s low.
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